By Tom Wyatt, Post-Tribune staff writer
WANATAH - Take all the corn produced in the United States, turn it into ethanol and it still could supply only 15 percent of the fuel used in this country.
That's Chris Hurt's way of telling farmers at Wednesday's Field Day at the Purdue-Pinney Agricultural Center that renewable fuel might be the wave of the future, but there are many hurdles ahead.
Hurt, an agricultural economist at Purdue University in West Lafayette, gave farmers an outlook in which, inevitably, corn and soybean prices will rise as a result of the growing demand for ethanol, used in E-85 mixes as an alternative to everyday gasoline.
Hurt said of the fuel used today, 3 percent is renewable. Analysts predict that number to be 25 percent by 2025.
And soon, as early as next growing season, farmers will be asked to increase the amount of corn they produce.
"This is a massive shift," Hurt said, estimating farmers will have to increase corn acreage by 10 percent over the next couple years once a corn surplus is consumed.
With demand, he said, come higher prices per bushel - good for the farmer's pocketbook. Soybean production, as a result, will fall. That, too, will be good for farmers, because the demand will then increase.
Hurt, though, still stresses caution, because the cost efficiency of ethanol is based on the price of crude oil. If the price of oil magically drops, which Hurt doubts, to $35 a barrel from about $80, ethanol becomes just another product.
But high oil prices will continue to produce a demand for ethanol. The problem will be meeting the coming demand.
Lt. Gov. Becky Skillman, also in attendance Wednesday, pointed to the 12 new ethanol plants now under construction across the state.
Those plants will need corn, but Hurt said corn isn't the sole solution. Ultimately, technology must create additional ways to make ethanol.
Hurt said corn prices could rise from about $2.20 per bushel to $3 per bushel by 2009; after that, it could go higher.
"If the ethanol industry wants grain," Hurt said, "You're going to have to produce it."
"We're going to have to have a substantial breakthrough in technology," Hurt said, pointing to cellulose or plant-based ethanol as a possible solution.